Latest forecast by the British Chamber of Commerce suggests that unemployment figures could rise to ten percent or around 3.1 million people during this year 2009. According to Credit Action personal debt in Britain today stands at almost £1.5 trillion in November and the amount of debt has surged ahead of the country's gross domestic product (GDP) last year 2008. The Council of Mortgage Lenders had forecasted up to 75,000 homes could be repossessed in 2009 if something was not done by the government to help.

With the above in mind it is little wonder that government help is urgently required. That's why during the last Pre-Budget report on the 2nd September, Alistair Darling announced that his Government would be providing a package to help homeowners who found themselves unemployed and struggling to pay their mortgage. He said that he was determined to support people during these difficult economic times.

The package Alistair Darling was referring to was the extension to the Support Mortgage Interest which came into effect today the 5th January 2009. This included shortening the waiting time for Support Mortgage Interest (SMI) from 39 weeks to 13 weeks and increasing the capital limit to £200,000. Today the Government is announcing that this new rule will also apply to people who are waiting now.

According to the Secretary of State for Work and Pensions, Mr. James Purnell the government has decided that they do not want a person who is unemployed through redundancy to worry about paying their mortgage. They want people who have already served 13 weeks or more of their waiting period by today the 5th January 2009 to be entitled to claim Support Mortgage Interest.

So what does all this actually mean to you and me? Well if you are unemployed through redundancy then instead of waiting 39 weeks for the government to pay just the interest on your monthly mortgage payment you would now only have to wait 13 weeks for Support Mortgage Interest to be paid by the government.

Previously Support Mortgage Interest would only have covered up to £100,000 and then on the 2nd September 2008 the government increased it to £175,000. Now under the new instructions issued by Alistair Darling at his pre-budget report he increased it to cover your mortgage up to £200,000. The standard rate of interest which is used as the basis to calculate Support Mortgage Interest has been frozen at 6.08% for the next six months.

The above scheme works well as long as your mortgage is less than £200,000 and your wife does not work or you are single. But what if you are a couple where the main bread winner has been made redundant and their partner continues to work and you still cannot afford your mortgage payments? Also how would this ruling affect a couple who had a mortgage and a secured loan under £200,000? Previously, you would not have qualified for Support Mortgage Interest; it might be possible to apply for the Gordon Browns other government incentive below.

Let's not forget Gordon Brown recently announcement for “middle income households” that his government would underwrite a £1 billion scheme which he had agreed with eight of the largest mortgage lenders. This scheme will be available to anyone who loses their job or suffers from a loss of income. For example: a couple where the main bread winner has been made redundant and their partner continues to work, but they are struggling to pay the mortgage.

Under this scheme any household with a mortgage of up to £400,000 will be able to defer some or all of their interest only payments on their mortgage for a period of no more than two years. To further qualify for this scheme you should have less than £16,000 in savings. The terms of suspension of mortgage payments will need to be agreed between the mortgage borrowers and their mortgage company or bank. More information and details are required and the devil may well be in the detail. Your thoughts, experiences and comments are welcome.